Monetizing the Social Web

by Jay Deragon on 10/03/2007

Monetizing the Social WebWeb communities such as MySpace and Facebook (and dozens of others popping up everywhere) have brought like-minded people together all over the world into hyper niche verticals that continually optimize themselves through rapid evolution.

From the advertiser’s perspective, each new social networking platform becomes a doorway to whatever psychographic and/or demographic being served by that web site.

All the old fuss aboutmonetizing the social network” is being addressed by technology to deliver contextual ads to site readers. The megapixels on each individual monitor become the billboard for advertisers looking at a very specific form of content, such as a news article, e-book or blog. Advertisers are salivating at the chance for precision guided targeting of the consumer, and although some privacy advocates are making noise, there is not going to be much in the way of behavioral targeting + contextual ads becoming Silicon Valley’s WMD in its attack on Madison Avenue.

This new “socialization” of the web brings together multiple niche communities with similar interests. But even though I have a MySpace profile and spend time on the site, it doesn’t necessarily mean that I also like the same things as one of my MySpace friends.

New” media marketing is all about serving highly relevant ads to every single user on the site. Because it is now possible to serve different ads on the same ad spot at the exact same time, advertisers no longer monopolize a specific time zone or TV network At any given time, if there are 100,000 unique visitors on a web site, and 10,000 of them are on the same page within that site, one could in theory serve 100,000 different ads from unique advertisers at the exact same time, all of them customized based on the users “web print”.

Although behavioral targeting has thrived by allowing marketers to offer ads that are customized based on the web surfer’s age, gender, location and online activities, in the immediate future not only will those variables be considered, but also the items the user may have been shopping for recently. For example, imagine you have searched for a specific bottle of wine from a shopping web site in the past couple of weeks, and were now on your favorite news site reading an article about foreign affairs.

At the end of your article, you might see an ad from a wine merchant suggesting you take a look at their inventory and pricing.To go one step further in our example, the merchant that is serving you the ad has agreed to pay the advertising network a generous fee if that user clicks thru and ends up purchasing a product. So the advertising network will be incentivized to track every single web user going through their network in a way that continually allows them to “guide” users to products that meet their real time interests. The convenience factor lies in that last term, “real time interests”.

But so does the “creepy” factor for some, again a topic I will save for another day. Back to our example, say you visited the site but chose not to purchase anything.Tomorrow when you log into your Gmail account to check your email, you will find a digital coupon created just for you by a competing merchant offering the same product at a 10% discount. This is “long tail” marketing at its finest.

The combination of statistical text analysis and clustering methodologies with semantic analysis procedures creates an outcome that can be different each time depending on multiple variations of subjects, keywords, and the unique relationships between them. In other words, each users screen becomes a dynamic megapixel billboard. Recently, while trying to compare broadband options for high bandwidth users, I was served an ad marketing 3000 Satellite Stations to my PC (free). Although I ended up buying the product, the moment I noticed the ad I wondered how specifically I was being targeted at that moment.

The natural evolution of this technology will be based on smarter and smarter algorithms that will be able to predict the potential buying habits of a shopper based on their behavior during certain days, seasons, local weather, and just about any data point you can imagine, including the performance of stocks they looked up recently on their favorite finance site.Contextual advertising is for those of us that have learned to subconsciously tune out banner ads when reading a site. Imagine Tony Soprano sitting in front of his white Cadillac while doing peyote in the desert during the shows closing season drinking a can of coke. That diet Coke is there for brand awareness. With advanced BT combined with contextual advertising, online advertisers (to take the analogy a bit further) could swap out the diet coke for a can of Budweiser, or a bottle of water, or even a carton of orange juice depending on what that viewer buys when they go grocery shopping, which Church web site they may have visited, or nutritional supplements they have purchased.

Although this is not yet possible for video, if you tune out the banner ads when reading up on a geopolitical situation that you’ve been following recently, the words within the articles will become active hyperlinks linking to products and items you are interested in. The same technology is being used on this article as you are reading because even I find the technology convenient if it is actually providing me with a benefit.

As an avid reader, I am thrilled when reading a very interesting article on the web which is embedded with hyperlinks to books being recommended by Amazon to me. It doesn’t bother me to read the word as a hyperlink and I can read through or hover my mouse over the link to see what the book is. It’s my choice. Furthermore, some words may hyperlink for me while other words will hyperlink for other readers based entirely on that reader’s interest.This is the maximum level of efficiency an advertiser can achieve when targeting a consumer but for the publishers of the world, this is absolute heaven.

What say you?

To read the full article go to: Monetizing Social Networks

also read: “The Advertising Factors”

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